From 10-minute deliveries to real-time digital payments via UPI and cash transfers through AEPS, technology has paved the way for financial inclusion and long-term growth. In the insurance sector, technology has simplified access to and understanding of insurance products, enabling customers to secure policies from the comfort of their homes quickly. Additionally, a wide range of tech tools has streamlined claims processing, enhancing efficiency and building customer trust in insurance. Across various sectors and industries, technological advancements have consistently made processes easier and more accessible.That said, this has also meant the spectre of cyber fraud has reared its head and is increasingly becoming a major cause of concern, both for companies across industries and individuals.

The COVID-19 pandemic with its social distancing mandates heralded a shift to digital solutions. This move, in due course, aided in financial inclusion and solved many pain points common people had to face. India is looking to use tech solutions powered by cloud computing, artificial intelligence, machine learning tools, and rapid transformations in public administrative frameworks to emerge as a digital-first economy with success stories in digital infrastructure, such as the Unified Payments Interface (UPI), Aadhaar, and the Open Network for Digital Commerce (ONDC) as the crucial benchmarks.

India is witnessing a surge in mobile phone use, deeper internet penetration, and rapid digital infrastructure expansion. According to MeiTY data, India’s digital economy is expected to reach the $500 billion mark by 2025

However, this good news is tempered by many challenges and threats. The rapid pivot to digitisation has meant unscrupulous elements can tap into tech-based systems and often target vulnerable groups. As digital infrastructure improves, the threat of large scale cyber-attacks and threats could impact Indian users as well. A spike in cybercrimes, both in frequency and complexity can impede business growth and put the brakes on the success of financial inclusion and digital payments.

Common cyber fraud methods and ways to restrain them

As more companies and entities use digital platforms for financial transactions and communication, cybercriminals find newer avenues to exploit vulnerabilities and perpetrate fraud. These include phishing attacks, in which individuals are tricked into revealing sensitive information, including login credentials or financial details, by cybercriminals impersonating trusted entities via emails, messages, or compromised websites.

Much like phishing, ransomware is also emerging as a potent threat. It involves cybercriminals encrypting key data points from a victim’s online behavior and demanding a ransom. The targets for these attacks include government agencies, businesspersons, and entities, often resulting in financial disruption and losses.

The threat of pretexting and baiting to manipulate individuals and businesses to disclose information or take actions to benefit attackers via psychological manipulation or deception also remains a potent threat.

The Internet of Things (IoT) has been transformative in many ways, but its use has also created vulnerabilities, as interconnected devices offer more entry points for cybercriminals. Weaknesses in IoT security protocols and inadequate device maintenance can result in exploitation by malicious actors.

There is no denying that these threats are real and potent. They require organisations and individuals to focus on cybersecurity by implementing robust authentication mechanisms, conducting regular software updates, and training employees on best practices in cybersecurity, in addition to increasing their regard for advanced threat detection and response capabilities.

To meet the threat of cyber-crimes, businesses, government, and enforcement bodies, along with regulators, must work together by sharing threat intelligence, coordinating response efforts, and promoting cybersecurity awareness to improve cyber resilience.

These issues also highlight the importance of cyber insurance solutions that can help mitigate potential losses from cybercrimes. These solutions can assist entities and individuals in reducing costs and covering damages in the aftermath of major cyberattacks.

The surge in cyber fraud cases underscores the need for a proactive and comprehensive approach to cybersecurity. By mitigating emerging threats, organisations and individuals can better protect themselves against cybercriminal activities and safeguard sensitive information in an increasingly digital world.

The author is Udayan Joshi, Chief Technical & Claims Officer, SBI General Insurance.

Disclaimer: The views expressed are solely of the author and ETCIO does not necessarily subscribe to it. ETCIO shall not be responsible for any damage caused to any person/organization directly or indirectly.